Life Insurance By Age

Written by Jeff Root

In the life insurance world, age is perhaps the biggest factor besides health that affects your life insurance policy options and life insurance rates.

As you get older, you are closer to the end of life. While this is a bit morbid, it is a reality we all must live with. As a result, life insurance rates increase as you get older, and the amount of coverage options you have shrink.

Finding affordable life insurance is possible at just about any age provided that you have a solid understanding of the coverage that is available to you, and know where to find it.

How Age Affects Life Insurance Rates

Your age defines the risk you pose to an insurance company. The older you are, the less healthy you are likely to be and the closer you are to your life expectancy, and therefore the higher risk you pose.

Life insurance rates increase with age accordingly to account for this risk.

Now, this really just applies to when you submit an application for a new policy. If, for example, you take out a whole life insurance policy, something permanent, then the company already rolls that increase per age cost into the premiums which is why permanent plans cost hundreds more per month than temporary ones.

Click on Your Age Below To See More Specific Details For You

20 Year Olds30 Year Olds40 Year Olds50 Year OldsOver 50

How Your Life Insurance Needs Change With Your Age

Your life insurance rates are not the only thing that changes with age.

Chances are, you will have very different needs for life insurance coverage depending on the stage of life you are in. While you are younger, you have less financial responsibility and financial dependents. As you approach the middle of your life, you will likely have the most debt and financial dependents who depend on you more than ever as your family grows.

As you begin to approach retirement age, you want to begin planning for retirement.

The table below shows some of the common needs for life insurance at various age groups.  While your needs may differ, this is the usual path that people take in their needs for life insurance as they grow older.

Age Insurance Needs
20-35 years old At this age, your needs are limited. You might need to take out enough money to coverage any remaining student debt, a new car loan, or just leave enough money that your parents aren’t responsible for your funeral if you were to pass away unexpectedly.
35-50 years old Once you reach this age bracket, your life has changed such that you probably have a family. At this juncture you will need coverage to potentially replace your income and provide for your spouse and children. Maybe you need support for your children too. There could be credit card debt, car loans, and a mortgage.
50-65 years old Reaching this age bracket, your needs change because you don’t necessarily have children dependent upon your income. You may not need to pay for child care, but your older children might need support for college. You may want to start supplementing your retirement by earning cash value with a permanent life insurance product. You may also want to give thought to long term care needs as you approach retirement.
65+ years old After retirement age, you need to consider whether you have enough in your retirement account, and if you have enough life insurance coverage to pay for your death expenses and remaining expenses once you are gone. Perhaps at this age you want to leave behind an inheritance for your children or grandchildren. You might also need to supplement your own retirement and plan ahead for disability or long term care needs.

What Types of Life Insurance Are Available By Age Group?

When you go to take out a life insurance policy you will notice that there are two main types:

  1. Term
  2. Permanent

According to the American Council of Life Insurers, 4.3 million people in the last few years purchased term life insurance policies while 6.4 million purchased permanent life insurance policies.

So, what are the key differences?

Term Life Insurance 

Term life insurance is the simplest type of life insurance. It will only pay out your death benefit if your death takes place during the term of the policy.

The term length can be anywhere between 10 year and 30 years. Term life insurance offers the cheapest form of life insurance coverage for people who are in good health. It also offers many riders that are available depending on the insurer and the policy.

Permanent Life Insurance 

Permanent life insurance is life insurance that lasts your entire life, or until the policy’s maximum age (which is usually either 95, 101, or 121). This type of life insurance policy accumulates cash value on a tax-deferred basis from the premiums you pay in and can be borrowed against tax-free.

There are many types of permanent life insurance policies which mainly differ from one another in the ways that they accumulate cash value.

This table below outlines the various types of permanent life insurance, how their cash value accumulates, and what you can typically expect with this type of permanent life insurance. Note that most permanent life insurance policies are offered to people through age 70, but as your age increases, so do your life insurance premiums.

For the most part, it is highly recommended that people who are looking for traditional permanent life insurance coverage begin investing in it at a fairly young age in order to secure far lower rates.

As you approach age 50, permanent life insurance coverage can become very expensive and unaffordable for most people.

Policy Cash Value Accumulation Who is it Best for?
Whole Life Insurance  Whole life insurance accumulates cash value at a steady rate which is agreed upon when the policy is first purchased. This rate of accumulation stays the same throughout the life of the policy and is guaranteed even in bad market years. Whole life insurance is best for someone who needs permanent life insurance coverage, can afford the premiums, and who is not looking to have an impact on how cash value is accumulated, for better or worse.
Universal Life Insurance Universal life insurance accumulates cash value over time based on the premiums paid in. With this policy, you can take money from your cash value and use it to pay your premiums as needed. This type of permanent life insurance policy is best for someone looking for flexible premiums with permanent coverage and cash value accumulation.
Variable Life Insurance Variable life insurance allows you to vary the premiums that you pay on a monthly basis. Much like universal, in bad months, you can elect to pay lower premiums or even have your cash value pay for them. In months where you have some extra cash, you can pay extra premiums which can help your cash value grow faster. Variable life insurance is best for someone who may be looking to get a faster jump on the cash value accumulation part of their permanent life insurance policy. Paying more premiums, in the beginning, can greatly increase your cash value accumulation.
Indexed Life Insurance Indexed life insurance gains cash value based on indices in the stock market. Your cash value growth of your policy is tied directly to one or multiple indices such as the S&P or DOW Jones. The percentage gains you make is directly correlated with the performance of these indices. There are typical provisions that prevent against negative net gains. Indexed life insurance is best for people who are looking to add an investment component to their permanent life insurance policy. In good market years, this can be the most profitable form of cash value accumulation. For someone with investing experience, this is a great choice.
Guaranteed Issue Life Insurance Guaranteed issue life insurance offers affordable permanent life insurance coverage to people who are in poor health or who need immediate life insurance coverage. Policies typically have a maximum face amount of $50,000, and no medical exam is required to obtain coverage. These policies are designed to cover final expenses and burial expenses with a few extra dollars for small debts. Guaranteed issue life insurance, or “burial insurance” as it is often called is best for people who have health conditions that prevent them from obtaining affordable traditional life insurance coverage. It covers burial and funeral expenses.

Life Insurance Policies Available For Each Age

Life insurance companies place age restrictions on the availability of different policies.

For example, if you are older, the life insurance companies will offer permanent plans, but only up to a certain age, often 85-90. Some companies extend that age restriction.

Other companies only offer their guaranteed issue burial insurance to those who are 50 or older.

There are often term limit restrictions based on age. The older you are, the less likely you are to receive a longer term plan. In these cases, the companies might offer a short, 10 year term plan, or their whole permanent policies.

For these reasons, age does play an important role and you need to be cognizant of that role so that you can prepare for the choices that lay ahead of you.

Age Insurance Availability
20-35 years old Term: 10-30 year

Permanent

35-50 years old Term: 10-30 year

Permanent

50-65 years old Term: 10-20 year

Permanent

Guaranteed issue/Burial

65+ years old Term: 10 year

Permanent

Guaranteed issue/Burial

How Much Does Life Insurance Cost by Age?

The table below shows term and permanent life insurance rates for people age 20 through 60.

While these rates will vary based on health, occupation, medical history, and more, these are generally some average life insurance rates you can expect for someone who is in preferred health in each of these age ranges who also does not smoke.

Age Policy Type $100,000 Male (monthly) $100,000 Female (monthly) $500,000 Male (monthly) $500,000 Female (monthly) $1,000,000 Male (monthly) $1,000,000 Female (monthly)
20 10 Year Term $7 $6 $13 $12 $21 $18
20 20 Year Term $9 $8 $19 $16 $33 $27
20 30 Year Term $12 $11 $30 $22 $51 $40
20 Whole Life $72 $64 $152 $128 $264 $216
30 10 Year Term $7 $6 $13 $12 $20 $18
30 20 Year Term $9 $8 $20 $17 $34 $29
30 30 Year Term $13 $11 $34 $28 $60 $50
30 Whole Life $72 $64 $160 $136 $272 $232
40 10 Year Term $8 $8 $19 $17 $30 $28
40 20 Year Term $11 $10 $31 $27 $58 $47
40 30 Year Term $19 $16 $58 $45 $108 $85
40 Whole Life $88 $80 $248 $216 $464 $376
50 10 Year Term $15 $13 $46 $37 $83 $67
50 20 Year Term $24 $19 $82 $61 $155 $112
50 30 Year Term $41 $31 $140 $107 $270 $206
50 Whole Life $209 $165 $682 $484 $1,287 $902
60 10 Year Term $32 $25 $122 $83 $226 $151
60 20 Year Term $60 $41 $235 $158 $456 $304
60 Whole Life $384 $300 $1,464 $996 $2,712  

$1,812

Can I Still Get Life Insurance Coverage With a Health Condition?

Yes, as described in the permanent life insurance table above, there are guaranteed issue life insurance policies that are designed to provide affordable life insurance coverage for people with health conditions.

Typically, these policies are offered to people up to age 80.

For people with health issues, or for people older than 80 who are looking for life insurance, there is affordable coverage out there. It may be difficult to find on your own and compare all of your options, so we recommend working with a professional.

Give us a call to work with an independent life insurance agent who can help you compare the best life insurance policies, companies and rates for your situation to get your family the coverage they deserve.

How to Find the Best Life Insurance Policy at Any Age

Finding the right life insurance coverage for you is not something that should be taken lightly. Life insurance is designed to protect your family financially in the event of your death.

Given the fact that as you grow older, your life insurance coverage needs will change, it is important to work with an expert when looking for the best life insurance coverage for your age group. An agent can help you assess your life insurance coverage needs not just not, but in the future as your family grows or needs shift, in order to help you find the best coverage for you and your loved ones.

Our independent life insurance agents work with dozens of the best life insurance companies on the market in order to help our clients find the best life insurance coverage for all ages. Give us a call today in order to speak with a professional who can discuss your coverage options with you. Or, get started online today using our life insurance quote tool for quick and easy life insurance rate comparisons.

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